Since it passed in December, one of the biggest questions surrounding the tax reform bill has been how the legislation will impact American families. The short – but unsatisfying – answer is: it depends. Most families won’t know the final verdict until they fill out their tax forms this time next year – when it becomes clear what combination of exemptions, deferrals, and deductions families qualify for. For most Americans, there won’t be a huge change in either direction – the child tax credit was expanded and the standard deduction increased, but other middle-class benefits, like the personal exemption and the state and local tax deduction were curtailed.

Why does the Aspen Institute Financial Security Program (FSP) even care about the tax code to begin with? In addition to raising revenue for important public programs, the tax code directly impacts families’ ability to build wealth – through saving for retirement and purchasing homes — and to achieve short-term financial stability – through refundable tax credits and work supplements.

The biggest issues threatening families’ financial stability

Research indicates that many Americans, even those well into the middle-class, are living paycheck to paycheck. Nearly half of Americans report that if they needed $400 in a pinch, they would have to borrow it or put it on a credit card.

And since the Great Recession, we’ve seen an increase in short term instability, including heightened income volatility – the swings that people are experiencing week to week and month to month in their wages – and large consumer debt loads from payday, auto, and student loans.

How tax reform can benefit workers

Issues like income volatility and consumer debt impact families in the short-term but, if they persist, have the potential to affect long-term financial health as well.

Corporate tax cuts – the centerpiece of the recent tax reform bill – are an opportunity for employers to make long-term investments in their workforce. Since the passing of the bill, some companies have announced bonuses to workers.

While one-time bonuses are great, tax reform presents employers with opportunities to help workers permanently improve their financial security.

One such opportunity FSP has explored is automatically enrolling workers into what we call a sidecar or rainy-day savings account – a short-term savings account tied to a traditional retirement account. Others include offering bigger matches on retirement savings through work and helping workers make student loan re-payments.

Tax reform is a chance for employers to become more holistic in their approach to helping workers not just with wages, but with wealth building through the suite of benefits that come with a high-quality job.

How a financially stable workforce can benefit employers

There is emerging evidence that financial problems are a huge preoccupation for workers: you’re not going to be as good on the manufacturing line if you’re worried about some overdue bill or you can’t afford your kid’s college tuition payment that month. And there is evidence that additional investment in worker’s long-term financial health will lead to higher productivity, lower worker turnover, and an improved bottom line.

Tax reform also presents an opportunity for businesses and policymakers to refocus the debate around how tax incentives, which often benefit higher income individuals more than lower-income ones, can be improved.

We often think of the tax code as this headache-inducing, thousand-page document, but a lot of important policy is driven through the code. If this becomes a larger part of the conversation, the resulting policy would be more equitable, and we would have a more rational tax code for individuals.